Celsius, a crypto lending platform that offers loans in Bitcoin and Ethereum, has frozen withdrawals due to a system error. The company is based in New York and reports that it’s working with the SEC to resolve the issue.
In a blog post published Sunday night, Celsius CEO Alex Mashinsky said that withdrawals had been “temporarily paused” while they investigated an “isolated incident.” He added that there was no evidence of hacking or any kind of breach involving user accounts.
Celsius is reporting the incident to the SEC
You may have heard that Celsius has frozen withdrawals, but you don’t need to panic about it. In fact, the reason for the freeze was to ensure that there are no issues with your funds in the event of a hack. The company is working closely with regulators and law enforcement agencies to find out exactly what happened.
Celsius is not hacked—its security protocols were just breached by an unauthorized user who obtained access credentials from one of our vendors. We’re working diligently on solutions that will allow us to resume normal operations for all users as soon as possible without putting them at risk again
Celsius CEO Alex Mashinsky says the platform isn’t hacked.
You’ve probably heard the news: Celsius, a crypto lender platform, has frozen withdrawals. The company claims that it isn’t hacked and that it’s simply working on a fix for an issue with its lending smart contract.
As of now, there’s been no indication that this is anything more than what they claim—a bug in their software. While it’s possible that something nefarious is going on behind the scenes (for instance, if their “fix” doesn’t actually fix anything), there are several reasons to believe that this is just a technical issue and not an attempt to run off with users’ funds or otherwise steal from them:
Celsius has been around since 2014—it’s not exactly new to the scene of cryptocurrencies and blockchain technology, so any hack would be surprising given all of its experience with these things by now;
They have enough cash on hand ($40 million) to pay back investors should anything happen;
Their CEO Alex Mashinsky has been involved in some very successful ventures before (he founded Xoom, which was later acquired by PayPal) which lends credibility to his ability to run a startup successfully;
The SEC is investigating the issue.
The SEC is investigating the issue, and it’s important to note that this isn’t unusual. The SEC is a government agency tasked with regulating the financial industry in order to protect investors from fraud and other wrongdoing. They often investigate companies who have been accused of doing something wrong, because they want to make sure people aren’t getting scammed by bad actors.
There are some questions about the future of Celsius that remain unanswered—for example, it’s unclear whether or not this will have any long-term effect on CEL prices. But what is clear is that the team behind Celsius seems very dedicated to maintaining a high level of transparency in their business dealings, which could bode well for them going forward.
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